Reasons for Bitcoin Price Crash 

Firstly, Bitcoin encountered technical resistance. Last week, BTC, which surpassed the high of $105,663, succumbed to heavy selling pressure. This led to a 4.23% price drop. CoinGlass data shows that $84.68 million of liquidations came from short positions, with $50.96 million from shorts. Additionally, Bitcoin’s volatility is at a 10-month low, making investors cautious. A bearish engulfing candlestick erased Sunday’s 3.23% gain. The critical support level stands out at $101,000. The volatility being at a 10-month low is keeping investors cautious. 

QCP Capital believes digital assets have more room for recovery. The expectation is particularly strengthened by Coinbase’s inclusion in the S&P 500 on May 19. Swissblock analysts observed that Bitcoin collected liquidity above the $104,000-$106,000 resistance range but failed to break out of this zone. Swissblock expects a decline if the price fails to hold the $101,500-$102,500 range. Based on historical on-chain volume and transaction data, analysts identify the $97,000-$98,500 range as a significant downside target. 

Altcoin Decline and Future Expectations 

Altcoins show high correlation with Bitcoin. Therefore, BTC’s crash hit ETH, XRP, and DOGE. Ethereum lost 8.76%, XRP 5.31%, and DOGE 9.11% in the last 13 hours. However, the overall outlook remains bullish. Bitcoin targets of $118,000 and $135,000 seem feasible. As a result, the $100,300 to $99,800 range should be watched as a support zone. Investors expect a slowdown in these levels. 

**NOT INVESTMENT ADVICE** 

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The market is apprehensive about the imminent distribution of assets by Mt. Gox, the defunct exchange that will start repaying clients in July 2024. These repayments will be made in BTC and Bitcoin Cash (BCH), potentially exerting additional selling pressure on both cryptocurrencies. BTC has already lost 3.3% in the past 24 hours, according to CoinGecko data, with the sell-off starting after the Tokyo equity markets opened. Major tokens such as Ether (ETH), SOL, and DOGE also suffered declines of up to 8%.

Futures trades betting on higher prices have experienced over $230 million in liquidations in the past 24 hours, according to CoinGlass. BTC and ETH futures alone saw over $60 million each in long liquidations, while futures tracking DOGE, SOL, XRP, and PEPE recorded at least $4 million in losses. Binance reported the highest liquidations among exchanges, with over $110 million.

Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to insufficient margin. This process indicates that leverage is being purged from popular futures products, often serving as a short-term signal of decreasing price volatility.

Trading firm QCP Capital predicts a subdued market for the next quarter due to uncertainties surrounding the Mt. Gox bitcoin supply release. In a Thursday broadcast on Telegram, QCP Capital stated, “We anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release.”

Overall, the market remains wary of the potential influx of BTC and BCH from Mt. Gox repayments and how it will affect cryptocurrency prices in the coming months.

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